Freeport Urges Gov’t to Respect COW

TEMPO.CO, Jakarta – Freeport Indonesia has asked the government to review their plan to ban concentrates export that is scheduled for enforcement on January 2017. The US-based miner said that based on the contract of work (COW), all export activities of processed minerals are the company’s rights.

“We are asking the government to overcome rules restricting the export of concentrate,” Freeport spokesman Riza Pratama told Tempo last weekend.

The Energy and Mineral Resources Minister’s Regulation No.1/2014 will ban the export of processed minerals starting January 11, 2017. Recently, the government has proposed a change in Government Regulation No.23/2010 on Mineral and Coal Business Activities. In the draft revision for Article 112 C point 1, miners with COW are mandated to purify their mined goods in Indonesia.

In revision draft also stated that miners who wish to keep exporting must change get a special mining license (IUPK). IUPK holders will be given a timeline for exporting their concentrates of no more than five years since the revision of Government Regulation No.23/2010 was signed.

Export licenses will also be limited to IUPK holders that are constructing smelters in Indonesia, with an export tax that is adjusted to the smelter’s progress.

Coal and Mineral Director General Bambang Gatot Ariyono said the drafts are still being discussed by the government. The draft also stated that IUPK holders will have a mining area that is smaller in size compared to COW holders. Contractors are also mandated to pay higher royalties and taxes.